Barracuda Announces Record Billings, Revenue and Free Cash Flow in Fourth Quarter and Fiscal Year 2014 Results
-Q4 gross billings up 18% year-over-year to a record $82 million
-Total revenue of $60 million in Q4, including recurring subscription revenue of $42 million
-Adjusted free cash flow of $19 million, or 31% of revenue
-Adjusted EBITDA of $17 million, or 28% of revenue on non-GAAP gross margins of 80%
-Total active subscribers exceeds 205,000
-Increased the number of multi-product customers in fiscal 2014 by 26% year-over-year
CAMPBELL, Calif., April 24, 2014 /PRNewswire/ — Barracuda Networks, Inc. (NYSE: CUDA), a leading provider of cloud-connected security and storage solutions, today announced results for its fourth quarter and fiscal year 2014, which ended February 28, 2014.
Fourth Quarter 2014 Financial Highlights
Billings & Revenue: For the fourth quarter of fiscal 2014, gross billings grew 18% to $82.0 million, up from$69.5 million in the fourth quarter of fiscal 2013. Total revenue increased 15% to $60.3 million, up from $52.5 million in the fourth quarter of fiscal 2013. Appliance revenue in the fourth quarter of fiscal 2014 grew to $18.3 million and recurring subscription revenue grew to $42.0 million, representing 70% of total revenue.
Net Income: GAAP net income in the fourth quarter of fiscal 2014 was $3.0 million, or $0.06 earnings per share, based on a diluted share count of 53.6 million. Non-GAAP net income for the fourth quarter of 2014 was$3.0 million, or $0.06 earnings per share, based on a diluted share count of 53.6 million. Non-GAAP net income excludes $3.3 million in stock-based compensation expense, $4.0 million in income tax benefit of non-GAAP exclusions, $1.0 million in amortization of intangibles, and $0.4 million in acquisition and other non-recurring charges. A reconciliation between GAAP and non-GAAP information is contained in the tables below.
Fiscal Year 2014 Financial Highlights
Billings & Revenue: For fiscal 2014, gross billings grew 17% to $310.0 million, up from $264.2 million in fiscal 2013. Total revenue increased 18% to $233.8 million, up from $198.9 million in fiscal 2013. Appliance revenue in fiscal 2014 grew to $71.9 million and recurring subscription revenue grew to $161.9 million, representing 69% of total revenue.
Net Income/Loss: GAAP net loss in fiscal 2014 was $3.6 million, or $0.10 loss per share, based on a share count of 35.4 million. Non-GAAP net income in 2014 was $5.1 million, or $0.10 earnings per share, based on a diluted share count of 49.1 million.
“We made good progress in the fourth quarter across all of our markets and product categories, especially our higher growth market categories of network and application security and storage, which are becoming larger portions of our overall business,” said BJ Jenkins, president and CEO. “During the quarter, we added over 7,900 new active subscribers, ending our fiscal year with more than 205,000 active subscribers. In addition to adding new customers, we also made good progress with our installed-base selling initiatives, accelerating growth in the number of multi-product customers. As Barracuda expands our product offerings and the availability of solutions in areas of growing adoption such as public cloud platforms, we are strengthening our positioning and availability of our security and storage solutions that simplify the lives of IT professionals.”
“We had strong financial performance in the fourth quarter, particularly with our cash flow metrics, which were driven by our billings growth,” said David Faugno , CFO. “Adjusted free cash flow in the fourth quarter was$18.7 million, or 31% of total revenue, and non-GAAP operating income was $3.3 million. The company closed the fourth quarter and fiscal year with total deferred revenue of $313.2 million, up from $298.8 million in the third quarter, and cash and cash equivalents of $135.9 million, up from $117.2 million in the third quarter.”
Recent Company Highlights
- New Product Launches and Updates – Extended the Barracuda NG Firewall model range for remote offices; expanded Copy for Companies to improve security and the user experience; announced worldwide availability of our new Backup-as-a-Service offering; and launched Threatglass, a free community resource where users can browse and analyze web-based malware.
- Expanding Cloud Presence – Announced the availability of the Barracuda NG Firewall on both the Microsoft Azure and Amazon Web Services (AWS Marketplace) public cloud platforms, and the availability of the Barracuda Spam Firewall in the AWS Marketplace.
- Market Share Recognition – Again ranked number one in integrated purpose-built backup appliance units shipped worldwide by IDC's Worldwide Quarterly PBBA Tracker, CQ4 2013; and named a leader in messaging security in the IDC Marketscape: Worldwide Messaging Security Appliance/Software 2013-2014 Vendor Assessment.
- Industry Recognition – Achieved “5-Star” rating in the CRN 2014 Partner Program Guide for the second consecutive year; named Network Computing 2013 Security Product of the Year for Barracuda NG Firewall; awarded three SC Magazine awards for Best Customer Service, Best Web Application Firewall for Barracuda Web Application Firewall and Best SME Security Solution for Barracuda Spam Firewall; received five Infosecurity Products Guide Excellence awards for Best Content Filtering Gold for Barracuda Web Filter, Best Storage & Archiving Gold for Barracuda Backup, Best Security Hardware Bronze for Barracuda Firewall, Best Cloud Security Bronze for Barracuda Web Application Firewall on Microsoft Azure, and Best Application Security Bronze for Barracuda Load Balancer ADC; and received the Reseller Choice Award for Best Cloud Backup.
Conference Call Information
Barracuda will host a conference call and corresponding live webcast at 2:00 p.m. PT today. To access the conference call, dial 1-877-941-2068 for the U.S. and Canada and +1-480-629-9712 for international callers. The webcast will be available live on the investor relations section of the Company's website athttps://investors.barracuda.com, and via replay beginning approximately two hours after the completion of the call for a period of one year. An audio replay of the call will be available to investors beginning at approximately5:00 p.m. PT today through May 30, 2014 by dialing 1-800-406-7325 in the U.S. and Canada, or +1-303-590-3030 for international callers, using passcode 4675013#. Additional information can be found in an accompanying supplemental investor slide presentation located at https://investors.barracuda.com.
This announcement contains forward-looking statements related to future product performance and market growth that involve risks and uncertainties, including statements regarding the Company's expectations regarding financial performance, the potential impact of our expanded product distribution channels, and product introduction. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including, but not limited to: fluctuations in demand for the Company's products and services; a highly competitive business environment for network security and storage solutions; the Company's effectiveness in controlling expenses, the possibility that the Company might experience delays in the development of new technology and products; customer response to its new technology and products; risks related to pending or future litigation, and a dependency on third parties for certain components of the Company's products. The Company undertakes no obligation to update the forward-looking information in this release. More information about potential factors that could affect the Company's business and financial results is included in its filings with the Securities and Exchange Commission, including, without limitation, under the captions: “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors,” which are on file with the Securities and Exchange Commission.
Non-GAAP Financial Measures
Barracuda provides all financial information required in accordance with generally accepted accounting principles (GAAP). To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release non-GAAP net income and non-GAAP operating income. In preparing our non-GAAP information, we have excluded, where applicable, the impact of non-recurring charges, stock-based compensation, amortization of intangibles and depreciation. We believe that excluding these items provides both management and investors with additional insight into our current operations and the trends affecting the Company. In particular, management finds it useful to exclude these items in order to more readily correlate the Company's operating activities with the Company's ability to generate cash from operations. Accordingly, management uses these non-GAAP measures, along with the comparable GAAP information, in evaluating our historical performance and in planning our future business activities. Please note that our non-GAAP measures may be different than those used by other companies. The additional non-GAAP financial information we present should be considered in conjunction with, and not as a substitute for, our financial information presented in accordance with GAAP. We have provided a non-GAAP reconciliation of the Condensed Consolidated Statement of Operations for the periods presented in this release, which are adjusted to exclude non-recurring charges, stock-based compensation, amortization of intangibles and depreciation for these periods. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the Company's ongoing performance as a business. Barracuda uses both GAAP and non-GAAP measures to evaluate and manage its operations.
About Barracuda Networks Inc. (NYSE: CUDA)
Barracuda provides cloud-connected security and storage solutions that simplify IT. These powerful, easy-to-use, and affordable solutions are trusted by more than 150,000 organizations worldwide and are delivered in appliance, virtual appliance, cloud, and hybrid deployments. Barracuda's customer-centric business model focuses on delivering high-value, subscription-based IT solutions that provide end-to-end network and data security. For additional information, please visit www.barracuda.com.
Barracuda Networks, Barracuda and the Barracuda Networks logo are registered trademarks or trademarks ofBarracuda Networks, Inc. in the US and other countries.
Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Reconciliation of Selected GAAP to Non-GAAP Financial Measures, Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA, Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow, Reconciliation of GAAP Revenue to Gross Billings, Condensed Consolidated Statements of Cash Flows, and the content of the above statement can be found at http://cuda.co/fy2014